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"The Church and the Libertarian": A Review

Applying our theory to parents and children, this means that a parent does not have the right to aggress against his children, but also that the parent should not have a legal obligation to feed, clothe, or educate his children, since such obligations would entail positive acts coerced upon the parent and depriving the parent of his rights. The parent therefore may not murder or mutilate his child, and the law properly outlaws a parent from doing so. But the parent should have the legal right not to feed the child, i.e., to allow it to die. The law, therefore, may not properly compel the parent to feed a child or to keep it alive.

Thus proclaims Murray Rothbard - one of the two primary architects of Austrian economic theory alongside Ludwig von Mises - in his treatise “The Ethics of Liberty”. The statement should rattle any normal person whose conscience hasn’t been dulled by drinking too deeply of libertarian “ethics”. But you have to give Rothbard credit for his ruthless ideological consistency: he drives his libertarianism to its logical conclusion, without blinking an eye, and in that one statement we can see his libertarianism for the naked obscenity it truly is.

You would think that orthodox Catholics, along with honest men in every Christian tradition, would be repulsed by any philosophy advocating such horrors, and would distance themselves in every way from its proponents. But the economic and political theories of Mises and Rothbard are growing in popularity even among otherwise solid Catholics – Catholics who are, perhaps, so frustrated with the relentless growth of the secular state, so appalled by the erosion of economic liberties, so horrified by the state’s usurpation of authority properly belonging to families and churches and communities, that they look upon Austrian economics as the only thing capable of effectively opposing the new totalitarianism.

But this is a colossal mistake. To borrow George Orwell’s famous adage, “we have now sunk to a depth at which the restatement of the obvious is the first duty of intelligent men.” Not that Catholic social doctrine is “obvious” to everyone – it must be sought after and studied like anything else, after all – but once studied it is obvious that libertarianism is wholly alien, and even antithetical, to the doctrinal precepts of Christianity as they pertain to “man, economy and state”. This is because Austro-libertarianism is more than just an economic theory: it is what amounts to a total worldview, and like its materialist twin, socialism, is in direct competition with the Catholic Faith.

Ferrara begins by explaining that the historic phenomenon of capitalism, which Austrian theorists laud for its material benefits, is not a creature of laissez faire economic conditions, but is in large measure the result of government confiscations, interventions, and the bestowal of economic advantages upon the wealthy. The only capitalism that has ever existed is an alliance of capitalists with the state – an alliance that continues to this day. Ferrara’s point here is to demonstrate that Austro-libertarianism is an exercise in pure abstraction, not the hard-headed economic realism it pretends to be.

As with most theological and philosophical errors, Austrianism goes wrong with a false understanding of human nature and purpose. Ferrara documents the anti-Christian views of Mises and Rothbard, both agnostic Jews, and their reflexive hostility to the Church and her influence. Their philosophy does not, therefore, consider man in light of his fall from divine grace, his duties toward God and neighbor, his ability to pursue holiness in a state of sanctifying grace, or the supreme importance of his eternal destiny. Instead, it considers man as primarily an amoral, hedonistic, comfort-seeking creature motivated by pure utility – or at least assumes that nothing else matters when it comes to “the ethics of liberty”.

And yet, this calculated indifference to moral and spiritual considerations in the marketplace is a fatal contradiction, as the Austrians cannot help but create an alternate morality in order to sustain their system. What is this alternate morality? The person, first of all, is conceived as “property” which is “self-owned”. The first precept of Austro-libertarianism is therefore “the absolute property right of each individual in his own person”. The second is like unto it: “the absolute right in material property of the person who first finds an unused material resource and then in some way occupies or transforms that resource by the use of his personal energy”. No man – and therefore, no government – may compel another man to do anything against his own will, or forcibly limit the use of the property in his possession, except to curb the violation of the aforementioned rights by one man against another. What is this but a new moral code? For Austro-libertarians, these precepts are virtually dogma.

This false understanding of man leads inexorably to a false understanding of the state. If man has no purpose higher than to seek his own satisfaction, then the state has no higher purpose than to facilitate man’s striving to fulfill his desires. For the Austro-libertarian, that means removing all obstacles to human action that do not violate the absolute sovereignty of every man’s person and property. However, Austro-libertarian anthropology can support other theories of the state which would horrify its contemporary enthusiasts: socialism, for example. Why shouldn’t the state circumvent the striving for human satisfaction and simply provide it? After all, that is the end-game: the satisfaction of human desires. The state might as well eliminate the economic disadvantages suffered by most people and get on with the business of satisfying those desires for everyone. Hence the propagation of Austrian ideas lends itself to the advance of socialism, for most people will adopt the Austrians' seductive anthropology - an easy sell that is already held by the majority - while leaving off their alternative (and completely arbitrary) “morality”.

Central to the Austrian error is the notion that market outcomes, if the market is left to itself (a practical impossibility in any case), are always “just” by definition. Therefore things like price gouging during shortages and emergencies, or unjust wages and exploitation of labor, simply do not exist in a “free market”. But the magisterium of the Catholic Church teaches explicitly, forcefully and authoritatively that market outcomes are not inherently just apart from other moral considerations, and this book provides a gold mine of references for the straying or doubting Catholic.

In 2009, despite the worldwide economic debacle we are still experiencing, Wal-Mart’s annual net sales rose 7.2% to $405 billion, with foreign sales of $100 billion ‘for the first time’. The company turned an annual pre-tax profit of more than $13 billion and ended the year ‘with strong free cash flow of $14.1 billion, an increase over last year [2008] of almost 21 percent’, while returning ‘$11.5 billion to shareholders through dividends and share repurchase this fiscal year, a level of return that is 58 percent higher than last year’.

Despite Wal-Mart’s immense success for its shareholders, the average full-time Wal-Mart ‘sales associate’ earns $10.84 per hour, for an annual salary of $19,165, which is below the federal poverty level for a family of four, while in 2009 Wal-Mart’s former CEO Lee Scott earned a total compensation of $29.7 million – a staggering 1,551 times the salary of a ‘sales associate’. Various members of the Walton clan have reaped scores of billions in the form of rising share prices, which continue to rise in the midst of the economic crisis, with the result that the Walton clan collectively is worth about $84 billion.

Yet 700,000 Wal-Mart employees have no medical coverage, and the rest must pay 20% of their already meager wages for limited coverage by way of payroll deduction, even though a small fraction of the Walton family’s wealth could permanently fund a self-insured, non-taxable medical plan for all 1.4 million of Wal-Mart’s American employees.

In a perfect example of how the ‘free’ market uses government to ‘externalize’ its operating costs so that it can scrimp on employee compensation, Scott declared that Wal-Mart employees without medical coverage should consider public assistance: ‘In some of our states, the public program may actually be a better value – with relatively high income limits to qualify, and low premiums’. Here we see how big business actually encourages the growth of the ‘nanny state’ Austrians so loudly deplore …

Once Ferrara is through prosecuting his case against Austrian theory, drawing heavily from the writings of its founders and contemporary exponents, he goes on to present the Catholic vision for a just economic, political and social order – not as an abstraction, but as practical doctrine with a practical history. A return to legitimate authority, to political and economic subsidiarity, to a system of professional guilds, and to the widespread ownership of productive capital must be the cornerstones of renewal. Understanding that a popular movement towards this end is a remote prospect at this point, Ferrara also provides a helpful summary of “practical distributism” that may be implemented by families and individuals on a personal level:

1) Create your own job.

2) If you cannot create your own job, join with others to create a cooperative or
worker-owned business.

3) If you must work for a company, persuade it to allow you to telecommute.

4) Try to convert part-time employment for wages into a part-time consultancy.

5) Instead of putting all your eggs in one employment basket, ‘keep the day job’ while seeking to create multiple income streams using your own equipment and working with family members in home-based activities, preparing for the day when you can leave the corporate job behind.

16) Kill your TV, or at least grievously wound it (apologies for the violent language). If you have a TV, don't watch it - study it.

17) Make your own bread. Eat real food, and avoid like the plague the ersatz, mass-produced capitalist food that has ruined the health of millions, including children.

18) Bring forth life abundantly, trusting in God.

19) Breast-feed your babies.

20) Practice the theological virtues of faith, hope and charity, and the cardinal virtues of prudence, justice, fortitude and temperance. The crisis of our civilization is a crisis in virtue.

For my part, while I completely agree with Ferrara’s critique of Austro-libertarianism in light of Catholic social doctrine, I am not sold on the viability of distributism as a radical, comprehensive solution. Rather, I think it is more a matter of Christianizing our existing system while incorporating, as much as possible and with minimal disruption, the best insights of distributism. To a significant extent we are stuck with mega-corporations and "factory farms", and while we might easily do without some of them, others are necessary for the economic health of the country. Employee ownership is a good idea in some cases but not, perhaps, absolutely necessary in all cases. Although we raise much of our own food on our northern California ranch, I have thus far been unable to work up a distributist-level disgust for “mass produced capitalist food” as such. While I am in favor of household energy independence, whenever practical, there is just no possibility of 300 million Americans, their workplaces, hospitals, businesses, and municipalities going “off the grid” apart from a national calamity the scale of which is too horrible to contemplate. I concede that I may have read too much Belloc, Chesterton and McNabb and not enough of those distributist writers who address the contemporary economic scene – a defect I am trying to remedy.

This brief review of Christopher Ferrara’s “The Church and the Libertarian” does not begin to do it justice. It is my sincere hope that this book will be read widely and carefully by Christians of every tradition who are concerned with economic questions, and who may not be aware of the origins and implications of the ideas they presently hold. A word of caution to those unfamiliar with this author: he’s a brilliant polemicist, and while there is a place for strong polemical argument, I think he’s overly polemical in places where it does more harm than good. It would be a shame if that habit were so off-putting that one dismisses the substance of this otherwise indispensable work.

Comments (66)

This is because Austro-libertarianism is more than just an economic theory: it is what amounts to a total worldview, and like its materialist twin, socialism, is in direct competition with the Catholic Faith.

I think this is what he really should've been aiming at-- anytime you extend a philosophy so far that it becomes a religion, you're going to be in conflict with other religions.

Like that old joke about democracy being two wolves and a sheep voting on what's for dinner? I seem to remember there's an entire poster that visually explains forms of government in terms of a guy and his cow. (IIRC, they're all taken to the worst possible extreme.)

It is my sincere hope that this book will be read widely and carefully by Christians of every tradition who are concerned with economic questions, and who may not be aware of the origins and implications of the ideas they presently hold.

The rational side of me insists that I point out that it doesn't matter where an idea came from, if it's a good idea; that said, folks really need to try to think through their beliefs... but also keep in mind that a lot of times, folks will say they believe X because it's a very simple way of expressing a more complicated view. (Example: I believe in self defense. This doesn't mean I can shoot the idiots on the high way, even though they DO put me at risk.)

AFAICT, the horrific quote is from a book trying to build society entirely from one point. (Tellingly, that point has zip to do with God.)

I have been arguing Rothbard's point to libertarians for years, as the critical breaking point for libertarianism: It simply cannot deal with children in a coherent manner. Not once have I seen a libertarian willing to accept that this cold repelling of obligations to children is implied in their theory - wish I had had this quote from Rothbard at my fingertips.

While I (like Lydia and Jeff) don't have a distinct revulsion for capitalist food, it remains possible to take up many of Ferrara's points as positive improvements. Unfortunately, every single attempt to grow vegetables has shown me that while I can get a small amount of fresher food that way, I cannot get decent quality without pesticides, nor sufficient quantity (under any method) to matter a whit overall, nor produce any food at all as cheaply as buying it at the store (or farmer's market): my increase in water bill always exceeds the store cost of the same amount of food. I am not sure the producing food at home, under these conditions, actually helps with a distributist program.

"While I (like Lydia and Jeff) don't have a distinct revulsion for capitalist food,"

While growing grains is a lot of work and not efficient on a small scale, it should be possible to get a lot of food from a small area. 1500 sq.ft. or so will give one all the winter squash one could want (it keeps for months) and salads take a far smaller area. Tony, are you aware of things like BT, rotenone, neen oil, and drip irrigation w/mulching? Not knowing your area it's hard to say but if yours is cool, things like fava beans are pretty much fool proof and there are many other such crops. Jeff and I have the advantage of our own wells and I have the elevation change that makes constant and sufficient pressure possible with minimum pumping cost but drip should help folks like you.

I have a small (600 sq.ft.) greenhouse and smaller ones are available at reasonable cost which help with the seasons. Semi-dwarf fruit trees can be very cost effective.

On the whole distributism seems to be an odd mix of practical measures and wildly impractical utopianism.

Haven't read Chris's book yet, but a few points I'd like to emphasize:

1. Libertarian rights theories in general, and Rothbardian rights theory in particular, cannot possibly be reconciled either with Catholic moral teaching or classical natural law theory. (I've argued for this in many places, but perhaps my Social Philosophy ahnd Policy article "Classical Natural Law Theory, Property Rights, and Taxation" is most relevant.)

2. It doesn't follow that this or that economics-based argument used by libertarians is incompatible with Catholicism or natural law theory. That is not to say that I endorse all such arguments -- far from it. But libertarian arguments often have two strands, a moral-theoretic strand and an economic-theoretic strand, that are not always carefully distinguished either by their defenders or by their critics. Nor, by the way, is this to endorse the idea of a "value-free" science of economics, which I also reject. The point is just that even when certain libertarians falsely claim to be giving "value-free" arguments, it still doesn't follow that the moral assumptions they are implicitly making are always bad (e.g. Rothbardian) moral assumptions. It depends.

For example, years ago Tom Woods on the one hand and certain Catholic traditionalists on the other had a very heated online exchange over the idea of the just wage. But it seemed to me then, and still does, that they were largely talking past each other and faling to make careful distinctions. In particular, Tom's critics were right to insist that the teaching that the just wage could in principle diverge from the market wage is binding teaching, and also that it is an error to think that economics is a "value free" science. But Tom was right to insist the claims made by anti-capitalists about what this or that wage "should" be are typically arbitrary, emotion-driven, and uninformed either by serious economic analysis or concern for empirical circumstances.

The truth is that applying Catholic teaching and natural law theory in these matters is a complex prudential affair. Hence, while it is important to condemn, in no uncertain terms, certain extreme claims made by Rothbardians and other libertarians on the basis of their false and dangerous theory of rights, once that is done I think it is better to put the "more Catholic than thou" rhetoric aside.

3. There is nothing in Catholic teaching that requires embracing distributism -- or, since that term is so vague, that requires going along with this or that opinion of this or that distributist writer. Indeed, like Jeff and Lydia I am not terribly impressed by distributist ideas, and I rather wish that paleo-conservative Catholics would get over the distributism fetish so many of them seem to have. (If you're going to find any point of view favored by the popes traditionalists tend to admire, it's not distributism but corporatism, which is not quite the romantic disributist "small is beautiful" view -- it holds that the small and the large both have their place -- and which in practice has, needless to say, problems of its own.)

In short, this whole area is a complete mess, and while there are definitely certain extreme views that need to be rejected as incompatible with Catholic doctrine and natural law theory, what practical policies a Catholic should favor is simply not as obvious or clear-cut as some people seem to think. There is much room for reasonable disagreement.

I would like to heartily concur with Mr. Feser's comment and assessment. The above article is full of errors and assumptions too numerous for me to want to pick apart one by one - not the least of which is that one cannot arbitrarily equate one's view of the state's role with a parent's role. Yes, such obscenely extreme views mentioned above by fringe libertarians are obviously un-Catholic, but I have yet to meet a single libertarian who believed anything close to that.

Moreover, this does a disservice to the ideas and approach of libertarianism and Austrian economics as a whole. Modern Neo-Keynesianism is a farce and ruinous to our society, and has become so distorted that even Keynes himself would rebuke it. Austrian economics, on the other hand, is derived from first principles and based on a logical framework of human economic activity. Of _course_ people want their desires satisfied; desires are not in and of themselves some great evil.

Strict libertarian capitalism has been rebuked by the Church just as socialism/communism has been. But that strict form is not only not a real danger today, it isn't supported by almost any libertarians. Which today is the greater danger: creeping Fabian socialism, or hardcore Austro-libertarianism? I think the answer is obvious, and if Catholic socio-economic teachings are somewhere between these two extremes (which it is), then when one side becomes overpowering, the other should be favored (generally, not the specific extremist stance) when it is the only other viable political option.

The only principle of governance with which I would think any Catholic ought to heartily agree (though I wouldn't go so far as to say it's doctrinal, to my knowledge) is that of subsidiarity. And I think any real Catholic is and ought to be in favor of a world where all men and women are Catholics, and society is itself Catholic - including government. But as long as that isn't a viable option (and it isn't), the most we can hope for from the state is simply that it will leave us alone.

But Mr. Feser is right: this is an open topic for debate, so long as it takes place within the confines of Catholic doctrine (which grants us a wide berth, to be sure). We must equally reject the total rejection of authority (anarchism/extreme libertarianism) and the total accumulation of it to the state (statism/socialism/fascism). Beyond that, it's fair game.

"even though a small fraction of the Walton family’s wealth could permanently fund a self-insured, non-taxable medical plan for all 1.4 million of Wal-Mart’s American employees."

Even if this is true (which I question), the real issue is whether Wal-Mart could have become a profitable business if it had provided free health insurance. The most Ferrara is entitled to say is that the Walton family isn't sufficiently charitable. What does Ferrara know about their charitable contributions?

Al, I have tried neen, drip watering with mulch, and a couple other things. I cannot erect a greenhouse (homeowner's association). If I drip enough, I always get various rots and pests (and high costs). If I don't drip enough, I lose the plants or at least 2/3 of its produce. There is probably a middle amount, but I never seem to hit it. I am in VA, not a cool climate.

Well, he knows that "the average full-time Wal-Mart ‘sales associate’ earns $10.84 per hour, for an annual salary of $19,165, which is below the federal poverty level for a family of four, while in 2009 Wal-Mart’s former CEO Lee Scott earned a total compensation of $29.7 million – a staggering 1,551 times the salary of a ‘sales associate’."

I wonder what Ferrara thinks about government-provided health care. Is it good or bad? If he thinks perhaps it would be just fine for the government to provide _everyone's_ health care, then why is he complaining about Wal-Mart's "externalizing" its health care costs? After all, if there's nothing wrong with government-provided health care, why shouldn't Wal-Mart employees be on it?

I have sometimes noticed a sort of interesting duality in a certain type of critic of the free market. On the one hand, they're up in arms about what some employer does or doesn't provide and about "externalization." On the other hand, they are willing to be on-board with various government programs. It seems to me that if you think the employer is the proper person to provide x, y, and z, then you have to be willing to take the chance that the employer won't do so.

Moreover, a legitimate argument can be made that everyone would do better if people purchased more of their own health care and that widespread employer-provided insurance is part of the cause of high costs. If this is correct, then not only is there nothing immoral about Wal-Mart's not providing health insurance for employees--the whole industry might be healthier if other employers followed suit, or if they went to something like MSA-with-high-deductible instead of full coverage. But no doubt _that_ would infuriate Ferrara.

In short, this is just one illustration of the fact that Ed is completely right: The actual practical issues here cannot be settled by loud-voiced uses of the word "justice."

"I am not sold on the viability of distributism as a radical, comprehensive solution. Rather, I think it is more a matter of Christianizing our existing system while incorporating, as much as possible and with minimal disruption, the best insights of distributism."

This is where I am too, Jeff. I ordered Ferrara's book last week after reading a positive review of it in the latest Chronicles.

"I wonder what Ferrara thinks about government-provided health care"

Not sure if he covers it in his book, but I'm pretty sure Medaille does in his new book on the subject, Toward a Truly Free Market.

I saw this book reviewed in the latest issue of "Chronicles" (which I check out from time to time in the bookstore). I gather from the review that Woods comes in for heavy criticism -- I'd love to read his response. That said, based on what you quote above, I would be hesitant to take Ferrara seriously if this summary is accurate:

"Ferrara begins by explaining that the historic phenomenon of capitalism, which Austrian theorists laud for its material benefits, is not a creature of laissez faire economic conditions, but is in large measure the result of government confiscations, interventions, and the bestowal of economic advantages upon the wealthy."

Capitalism, or the industrial revolution in Holland, Great Britain and then America is just not a result of "government confiscations, interventions, and the bestowal of economic advantages upon the wealthy" in large measure or small measure. If he gets the basics about capitalism wrong, I'm not sure I can trust the rest of his analysis.

I don't understand why the argument, "My critics persistently challenge me," would be enough to convince you. All of Woods' articles are little more than filibustering. He's commonly self-referential and non-responsive. I guess that is fine if you want your biases confirmed, but it isn't serious scholarship.

Dear Mr. Singer. Woods, not an economist, follows the ideology of Jesus-Deniers while he, routinely, opposes the authority of The Popes and denigrates their knowledge about the Economy.

Thomas Fleming at Chroinicles:
Our old friend Tom Woods has painted himself into a corner. Portraying himself as an uncompromising ultratraditionalist who will have no truck either with the Novus Ordo or with anyone who does not condemn the Orthodox to Hell, he nonetheless takes it upon himself to contradict the Church’s fundamental teachings on morality and society. Woods’s attempt to limit his attack to the encyclicals of Leo XIII and his successors is at best disingenuous, since the Church has spoken with one voice on our responsibility, both individual and collective, to provide for the poor and to practice economic justice. The voice was and is the voice of Christ. Woods is not rejecting merely this or that Pope or even the traditions of the Church: He is rejecting the teachings of Christ. If he or his libertarian friends dispute this statement, let them cite the Scriptural passages and authoritative Fathers and theologians who can refute it.

And for what mess of pottage is young Thomas selling his Catholic and Christian birthright? For the economic theories of the Austrian school, which he regards not simply as theories but as scientific truths as rock-solid as the Pythagorean Theorem or the formula for DNA. Let us set aside, for the sake of argument, the authority of the Church or of Christ Himself, and look only at this assertion. Since Adam Smith, there have been many economic theories, some of them more probable than others, and on certain questions there is broad—though hardly universal agreement; on others none at all. Even major economic thinkers on basically the same side—say Friedman, Rothbard, and Stigler—disagree on many things. How does a non-economist—like Woods, his mentor Lew Rockwell, or me—decide which of their writings is Holy Writ, which is apostolic apocrypha, and which is arrant heresy? I don’t know and neither do they.

Science is a slippery term because in English we use it primarily to mean a hard science like physics and chemistry or microbiology. Sociology and economics are only metaphorically sciences in this strict sense. Of course any disciplined body of knowledge is also a science, as theology and literary criticism are sciences, but these looser sciences do not presume to dictate absolute rules on the order of 2+2=4. Aristotle settled this question long ago, and it is one of the prime mistakes of the modernists since Descartes to pretend that there can be an absolute science of human behavior or society. If Woods were consistent in his logic, he would have to set all the teachings of the social sciences against the teachings of the Church. He would of course argue that economics is somehow different, but who would agree with him?

In championing the social sciences over the magisterium, Woods is adopting an old, though discredited line of thought going back to the Averroists, namely, that revelation and philosophy are independent of each other. The Church rejected this reasoning a long time ago, if only because it implies that the teachings of the Church are incompatible with the truth as discovered by reason. One may, of course, declare the Church’s traditions to be hogwash, but one cannot at the same time claim to be Catholic.
One of the sources of Woods’ confusion is that he does not distinguish between economics as an analytical tool subject to verification and economic philosophy, which is a branch of ethical and political theory. These are quite distinct, just as distinct as evolutionary theory and social Darwinism. I might generally endorse Adam Smith’s analysis of markets, as I do, while repudiating his moral philosophy (The Theory of Moral Sentiments), as I also do. Put simply, a mathematician has the right to instruct the Church on the rules of geometry, but he has no right to tell the Pope how those rules are to be applied, for example, in the construction of a Church. To take a trivial example, the sphere might be a perfect shape, mathematically considered, but it is hardly the right shape for a Church.
Let us then for the sake of argument assume that the school of Mises and Hayek and Rothbard is entirely right in its economic analysis of how markets and business cycles work—though not even the most scientific discipline has arrived at such absolute truth. If they are correct, they can predict the results of political decisions that constrain the market—zoning restrictions applied to the centro storico of Rome and the Borgo Pio (the neighborhood beside the Vatican). What they cannot do—as a real advocate of the free market is supposed to understand—is dictate our preferences. What if I prefer to see the Campo dei Fiori as it is and do not want the monument to the burned heretic Giordano Bruno to be torn down and replaced by a McDonald’s or the ruined Theater of Pompey turned into a Wal-Mart? How can an economist presume to tell me I am wrong?

Who made Mises or Rockwell or Woods the moral and aesthetic dictators of the human race? Of course, they would respond that they don’t care what our moral or aesthetic preference might be, so long as we do not impose it by the government. I realized the childishness of this argument long ago, when I proposed a solution to the censorship problem. “Let’s take government out of the picture,” I suggested. You can sell any kind of pornography anywhere you like and I can burn down your store—it will be up to you to defend your premises. Oh, but protection of private property is a sacred duty of government. Really? More sacred than protecting the innocent? When push comes to shove, the libertarian always invokes the power of the state to protect what he wants, and he sees no contradiction when other leftists want to use the state to protect what they want. Yes, other leftists.
Let us be clear what the argument is and is not about. Neither I nor my colleagues are collectivists or socialists. We utterly condemn and repudiate Marxism in all its forms. We also seek to limit rather than to expand the power of the state. As I used to say to my old friend Murray Rothbard: Let us agree on dismantling 90% of what the US government does, and until we succeed, let us postpone all argument about the other 10%. I have also argued, far more explicitly and coherently than the Austrians, against the welfare state that is a mockery of Christian charity up to and including Social Security. What Woods and Rockwell are arguing for, however, is not merely the limitation of the state to protection of their interests. No, they are explicitly denying the moral order and, because that argument has limited appeal, they attempt to fool their followers by pretending to champion economic freedom against its enemies, whether those enemies are Marxists or collectivist Catholics. To imply that Leo XIII—or any Pope before Paul VI was any kind of socialist—is dishonest.
Yes, Popes have made mistakes and Church Councils have gone astray and received correction from later Councils, but the Tradition of the Church is infallible. And, to give no offense to our sincere Protestant friends, I am happy, for the sake of this argument, to stipulate any reasonable cut-off date—say A.D. 1000 or even 600—because the catholic and orthodox traditions of the Church have spoken with one voice, not only on the nature of the Trinity but also on man’s moral responsibilities.

The Church has always repudiated both Communism and Liberalism (that is, the free-market individualism preached by Smith and Mill). In advocating social responsibility for employers’ and governments, 19th- and 20th-century Popes were simply confronting the challenges of their own age, just as the earliest Popes confronted the challenges of Arianism and Monophysitism, Goths and Lombards. If Tom Woods and his libertarian buddies want to preach a different social gospel, they would do well to look for another religion. What is the point of clinging to the formalities of a Latin mass, whose language they do not know, if they are willing to jettison the teachings of Christ and his Church on which their hope of salvation depends? Of all the heresies the Church has faced in its history, the Austrian heresy must be the pettiest. Give it up, friend Thomas, and return to the Church.

Normally I shy away from doing book reviews. This one was requested by two persons who are themselves masters of that craft, E. Michael Jones and Thomas J. Herron. Perhaps they feel less comfortable reviewing a book about economics than its author Dr. Thomas E. Woods Jr., felt about writing such a book, even though he is billed as an Assistant Professor of History at Suffolk Community College of State University of New York. His work is a venture into economics involving the suggestion of expertise even in such specialized areas of that science as methodology and the somewhat arcane field of monetary theory. Knowledge of theology and philosophy is a forgone conclusion in a work intended to expose the Catholic Church’s supposedly flawed venture into moral teachings about the economic order.

Immediately upon reading the Introduction of the The Church and the Market, it dawned on me that the book calls for an exposé rather than a review. I was transported back in time to when someone asked me to do a review of Michael Novak’s work on The Spirit of Democratic Capitalism (1982). As a matter of fact the name of that arch-dissenter against the Magisterium (Humanae Vitae, papal social teachings, and the justice of the disastrous war in Iraq) appears on the second page of the book as the head of the Advisory Board for Studies in Ethics and Economics sponsored by the Acton Institute. The author did not disappoint either the advisor or the Institute. The old adage about the apple falling not far from the tree is demonstrated in the opening pages of the Introduction (p.5) where we find a typical Novakian blast:

Now if it can be shown that any arrangement other than that achieved on the unhampered market must make workers worse off, there can hardly be a reasonable objection to my suggesting the market as the best way of implementing the popes’ concern for working conditions, even if this particular solution may not have occurred to them (as indeed it does not occur to most people).

That struck me as a pretentious and presumptuous bit of pomposity. A host of some of the most impressive and saintly popes in the long history of the Church are in effect presented as “dummies” along with “most people,” which would be the rest of us peasants! And that is by a Catholic historian writing a book about economics, who proposes that the popes speaking in magisterial terms for what Paul VI first referred to as the “expert in humanity” are out of their depth. I would suggest that here is one assistant professor of history who had best catch up on his historical studies so that, among other things, he could comprehend what persons so far apart in ideology as Karl Marx and Bishop Wilhelm von Ketteler and Leo XIII (who regarded himself as his disciple on such matters) learned long before there was a well-heeled Acton Institute to turn the clock back to Victorian times.

Dr Ederer interviewed:
9) What is your view of the Austrian school of economics and related organizations such as the Ludwig von Mises Institute?

The much vaunted “Austrian School" - by which is usually meant Ludwig von Mises and Friedrich Hayek - two agnostic positivists - involves mainly an attempt to restore the "Free Market Economy of the Victorian era."5 It is opposed to the Church's social teachings, and Pope Paul VI and John Paul II cited that opposition referring to the new attempt at revival as "neo-liberalism" (Octagesima Adveniens 35-36; Ecclesia in America 56).6 Mises is old stuff, and Pesch already dealt with his free market advocacy as "neo-Manchesterism." (Lehrbuch V,bk 1, p.v).7 The movement was advanced by American Presidents, both Democratic (Carter and Clinton), and Republican (Reagan and Bush I and II).

10) What is your impression of the Acton Institute? Is it aligned with the tradition of von Ketteler and Pesch or some other school of philosophy and economics?

The Acton Institute is more of the same. It is a "think tank" headed by a Catholic priest, well financed by business interests which fit perfectly the papal designation -- neo-liberalism -- therefore another advocate of free markets.8 It is my understanding that there are Calvinist roots, but I cannot substantiate this.

Mr. Woods has written some wonderful things about Catholics and Science but when it comes to the ideology of the Austrians, he is way off base and exposes his fundamental protestant orientation (he is a convert).

Dr Woods, like Mr Rockwell, often cites 16th Century Spanish Theologians as being in support of their Austrian ideology (which they claim is Catholic Compatible) but, wouldn't ya know it, those same Spanish Theologians never appear in any of the footnotes of Catholic Social Doctrine.

The Catholic Church does support "Free/Cheap Health Care" - "Laborem Exercens"; Besides wages, various social benefits intended to ensure the life and health of workers and their families play a part here. The expenses involved in health care, especially in the case of accidents at work, demand that medical assistance should be easily available for workers, and that as far as possible it should be cheap or even free of charge

A LOT of Catholics are falling for this Austrian Heresy including, sadly, Fr. Zuhlsdorf, over at WDTPRS where he is a big supporter of Fr Sirico and The Acton Institute.

And irony does abound for the Austrians who feel at liberty to oppose the Magisterium of The Catholic Church and to criticise The Popes but who (see the current issue of "Chronicles") excommunicated R.Cort Kirkwood from the Rockwell Site after he opposed the Libertarian Ideology of Rothbard on self-ownership.

"Moreover, a legitimate argument can be made that everyone would do better if people purchased more of their own health care and that widespread employer-provided insurance is part of the cause of high costs. If this is correct, then not only is there nothing immoral about Wal-Mart's not providing health insurance for employees--the whole industry might be healthier if other employers followed suit, or if they went to something like MSA-with-high-deductible instead of full coverage."

1. You are aware, of course, that the evil "Obamacare" does to some extent what you suggest and that attempting it was part of what cost Sen. Bennett his job.

2. We are now in Marie Antoinette territory. Suggestions that folks with families and real low five figure incomes use MSAs and catastrophic insurance should be accompanied with explanations as to how they actually do it.

3. The Wal-Mart model is to pass on health care costs to the insured and the taxpayer. This is hardly moral behavior. Medical costs can only respond to market forces if we use veterinary care as a model.

Shocka!! The Acton Institute is an advocate for free markets! Well, obviously, then, we don't have to listen to _them_.

I must say that the dismissals I've seen of Acton from certain Catholics are risible. I saw one Catholic, very similar to Ferrara in both nature and ideas, insist nearly foaming at the mouth that Fr. Sirico is a liberal, a liberal, a liberal. For his economic ideas, of course. That was sufficient.

medical assistance should be easily available for workers, and that as far as possible it should be cheap or even free of charge

If this is _just_ referring to the employer's paying for medical expenses arising out of work accidents, it makes sense, though then it would not be "free of charge" but rather would be paid for by the employer through accident insurance.

If this is saying that *in general* medical care "should" be "cheap or free of charge," as though by waving a magic wand we can just make goods and services exist and be given out for free or "cheap"--poof!--then it is stupid.

Fortunately, as a Protestant, I can say that without worrying overmuch which it is.

Dear Lydia. Here is Fr Sirico (whose background as a radical homosexual activist ought to have prevented him from being ordained by The Paulists):

"So long as individuals avoid forceful or fradulent actions in their dealings with one another, government is to stay out of their business" (Acton Notes, January 1998).

That is classic Liberalism and utterly opposed to Catholic Doctrine.

Libertas Praestantissimum: (Pope Leo XIII)

[T]he eternal law of God is the sole standard and rule of human liberty, not only in each individual man, but also in the community and civil society which men constitute when united. Therefore, the true liberty of human society does not consist in every man doing what he pleases, for this would simply end in turmoil and confusion, and bring on the overthrow of the State; but rather in this, that through the injunctions of the civil law all may more easily conform to the prescriptions of the eternal law….What has been said of the liberty of individuals is no less applicable to them when considered as bound together in civil society. For, what reason and the natural law do for individuals, human law, promulgated for their good, does for the citizens of States"

Dear Lydia. I think it is saying that Health care ought be free or as cheap as possible; and I think the "free" is intended as referring to the money not having to be paid directly to the provider by the patient- - and not indirectly through taxes, etc.

But, because I specialise in error, I am open to correction.

The Common Good, Universal Destination of Goods, Social Justice etc are all tied in with this but I think that Messers Culbreath, Liccicone and Feser are far more capable of writing about these matters than an aspiring-to-become-middle-brow autodidact.

What I do know is that The Austrian School - following the putative authority of a couple of Jesus-Deniers - and The Acton Institute - founded by Calvinists - do not represent fairly or accurately Catholic Social Teaching.

Catholics would do much better by beginning with "Ethics and The National Economy" by the great Fr. Heinrich Pesch, S.J.

I think the "free" is intended as referring to the money not having to be paid directly to the provider by the patient-

Well, I simply could not disagree more, if this is what is meant. Widespread third-party paying is the problem, not the solution. And the perception that it makes things "free" is a huge part of why it is the problem.

Dear Lydia. I'm going to bow-out re the discussion. I confess my ignorance of the subject.

I do know the Catholic Church has generally supported Unions and the Unions are/have been the third party payer in many instances of Union Members and their Health Care but I also recognise that orthodox Bishops, such as Bishop Nickless, have taught that health care is a political and not a natural right and so how the matter of health care is provided is a matter of prudential judgment (certain Catholic Principles, such as subsidiarity, being maintained/instituted).

~~[Mises' and Rothbard's] philosophy does not, therefore, consider man in light of his fall from divine grace, his duties toward God and neighbor, his ability to pursue holiness in a state of sanctifying grace, or the supreme importance of his eternal destiny. Instead, it considers man as primarily an amoral, hedonistic, comfort-seeking creature motivated by pure utility – or at least assumes that nothing else matters when it comes to “the ethics of liberty”.~~

Since economics is based on understanding human activity, one would think that you'd have to have a somewhat valid view of the nature of humanity in order to analyze man's behavior and how he makes his choices, whether economic or not. I've not read Mises's Human Action, but from what I understand it's every bit as atheistic as Marx. Why should Christians, then, accept virtually uncritically an economic system which has at its root an anti-Christian understanding of human nature and action?

Besides wages, various social benefits intended to ensure the life and health of workers and their families play a part here. The expenses involved in health care, especially in the case of accidents at work, demand that medical assistance should be easily available for workers, and that as far as possible it should be cheap or even free of charge

Lydia, I don't think you are reading this the way it was intended. First of all, it was not a general prescription that applies across the board, as a principle. The phrase "as far as possible" gives that away. It depends on circumstances very much. At the time Leo was writing, workmen's comp insurance didn't exist, and a larger percentage of workers were injured on the job in factories, coal mines, etc. The pope was pointing out a simple matter of justice: if the job as such causes the injury, then in justice the job as such ought to provide the means for dealing with the result thereof. It could in theory provide by paying enough in wages so that the worker could save up for his health care, but in actual fact there were tons of wage slaves who literally could not save up while feeding themselves. The "even free of charge" applies much more to on-the-job injuries than to general health care, also. In the context of the times, Leo's description is a pointer toward a potentially more sound Christian employer, but is not prescriptive of bedrock principles. While we now know that third-party payor for insurance does present some problems to the system as a whole, there was no way for that to be certain at the time. What was certain at the time (and remains true) was that employment that uses up a normal full grown man's full capacities as a worker for a full day, each day for 6 days a week, should also be employment that generally provides for the man's long term sustenance as a human being: that is, as a father and husband, providing food clothing shelter health and education for him and his own, at the very least to the extent that these would enable society to continue to form new citizenry of comparable capacity. (A factory that uses up workers after 10 years and depends, inherently, on new workers coming in from the countryside every 10 years, is a deformed social institution.)

Whether the employer does so in the form of insurance or wages sufficient for larger savings is NOT an issue the pope was trying to address in any definitive manner. What he was addressing was conditions in which the employer was providing neither insurance nor wages sufficient to set anything aside for troubles. The "or even free" must be taken in context: few of the wage workers at the time had more than a 3rd grade education, and only a few could have successfully invested significant savings in a worthwhile manner (more likely would have been ripped off by charlatans). In this respect, it is likely that continental conditions were considerably worse than here in the States.

Indeed, like Jeff and Lydia I am not terribly impressed by distributist ideas, and I rather wish that paleo-conservative Catholics would get over the distributism fetish so many of them seem to have.

Actually I am impressed by many of their ideas; others, however, do strike me as utopian and impossible to adapt to the modern economy without creating more problems than they purport to solve. But I lack imagination. I'm beginning to read John Medaille's "Towards a Truly Free Market", and trying to keep an open mind.

(If you're going to find any point of view favored by the popes traditionalists tend to admire, it's not distributism but corporatism, which is not quite the romantic disributist "small is beautiful" view -- it holds that the small and the large both have their place -- and which in practice has, needless to say, problems of its own.)

Can you direct me to some resources on Catholic corporatism? Apart from the policies of the martyred Garcia Morino in Ecuador (see Charles Coulombe, "The Quest for the Catholic State"), I'm largely unfamiliar with any real-world attempts at implementation. Subsidiarity, of course, acknowledges that some things must be "big" to be effective.

Right, Tony, I left open the possibility that it was actually talking about on-the-job injuries. I actually agree that that's a matter of justice for the employer to take care of unless it can be demonstrated that the employee was wantonly reckless or something strange like that.

Where the problem comes in is if it's saying, "Hey, health care is a great thing, and darn it, it *should be free*" as though this could simply be made to happen. I have to tell you that I have indeed seen some papal statements on economics that have something of that ring. One was to the effect that society must value agricultural labor equally with industrial labor--something like that. (I'm paraphrasing from memory.) There are just major problems with acting as though you can just *make* society value certain things equally or *make* goods and services free, as if there are no inherent reality problems here, as though good intentions create material reality ex nihilo. That is of the very essence of what Sowell called the Vision of the Anointed--that intentions are what count and that reality bows before them.

Yes, such obscenely extreme views mentioned above by fringe libertarians are obviously un-Catholic, but I have yet to meet a single libertarian who believed anything close to that ... Which today is the greater danger: creeping Fabian socialism, or hardcore Austro-libertarianism?

First, Austro-libertarianism is dangerous for the simple reason that it is a theological error - and a rather brazen, defiant error at that. Deliberately embracing error in the face of clear magisterial teaching is a risky habit for Catholics to get into, to put it mildly. The involvement of prolific, intelligent, prominent and influential Catholics compounds the problem. Souls hang in the balance. The child starvation quote was taken directly from the Mises Institute website, to which I linked. Apparently, they are not the least bit ashamed of it.

Second, it is dangerous because, as I mentioned in the review, its fundamental anthropology provides a theoretical basis for socialism as well as capitalism. If the primary end of man (so far as the state is concerned) is the satisfaction of human desires, then socialism is a much more attractive solution than what the Austrians are offering. Therefore the promulgation of Austro-libertarianism, because of its false anthropology, is indirectly and unintentionally paving the way for the "easier" path of socialism.

"even though a small fraction of the Walton family’s wealth could permanently fund a self-insured, non-taxable medical plan for all 1.4 million of Wal-Mart’s American employees."

Even if this is true (which I question), the real issue is whether Wal-Mart could have become a profitable business if it had provided free health insurance. The most Ferrara is entitled to say is that the Walton family isn't sufficiently charitable. What does Ferrara know about their charitable contributions?

In the book, Ferrara contrasts Wal-Mart employment policies with that of another retail giant, Costco. Costco "pays its line employees $16 an hour compared with $9.98 an hour at Wal-Mart". He also notes that "after three years a typical full-time Costco worker makes about $42,000 per year, and the company foots 92% of its workers' medical costs."

Could Wal-Mart have built its retail empire to its present size while providing its employees with health insurance? Possibly, yes. But maybe not. Stingy employment practices are just one of many unscrupulous habits that some large corporations believe they must have to succeed. It must become a habit - indeed, a principle - to pay no more than rock bottom prices or wages for anything. It must become a habit to provide no more than minimally tolerable working conditions. It must become a habit to do whatever it takes to drive all competitors out of business. Etc. These habits might have been "necessary" for success at first, but once a business has reached the heights of financial success, it dare not change its habits, even if it could, without jeopardizing that very success.

Today, Wal-Mart could easily pay just wages and provide health insurance to its employees, but it chooses not to. The thought probably never crosses the mind of the Walton family or Wal-Mart executives. They have a "successful" business model. It made them who they are. To change it now is unthinkable.

I wonder what Ferrara thinks about government-provided health care. Is it good or bad?

In his book, Ferrara strongly condemns Obamacare. I don't know what he would say about "government provided health care" being good or bad in the abstract. I know what I say: it's neither good nor bad in itself. Asking whether "government provided health care" is good or bad is, in my view, a needlessly ideological way of framing the question.

For many people, government-provided health care is certainly better than no health care at all. The best is probably some form of cooperation between families and employers with the Church and religious providers. Lacking a population that supports the Church with its resources, capitalist-provided health care is a decent alternative, the only problem being that it doesn't reach far enough without the prodding of the state.

If he thinks perhaps it would be just fine for the government to provide _everyone's_ health care, then why is he complaining about Wal-Mart's "externalizing" its health care costs?

Ferrara certainly does not believe that it is "just fine for the government to provide everyone's healthcare". Clearly he believes, as do I, that it is better for employers and mediating institutions to provide whatever individuals and families cannot provide for themselves. The state's role is properly supplementary. His criticism of Wal-Mart is precisely that its unjust employment practices exacerbate the need for supplementary public assistance and, in so doing, fosters and perpetuates the nanny state.

Great comment, Rob. I wish I knew. It's a common trap for many people, out of pride, to remain stuck with their first educated opinions and enthusiasms. Others, I think, overreact to certain errors by embracing extreme ideas in the opposite direction. Some obviously have personal interests and opportunities at stake. And I remain hopeful that many are in error in good faith, being honestly persuaded by strong but flawed arguments.

I do not promote nor believe in Austro-libertarianism, and condemn it as a heresy like any other. But it is an extreme form of a particular strand of economic thought, the end of a spectrum regarding markets and govt intervention. My point was that, while it is a danger (as is any heresy), it is far, far less of one than socialism is today. Moreover, the creeping socialism that has integrated itself into the American political scene means that the best thing for a Catholic to do today is to support less government control and interventionism, which roughly aligns with a more libertarian approach.

I find this whole debate rather silly, I'm sad to say, though I do not doubt the sincerity of what everyone is trying to explain. But it brings to mind those people who bomb abortion clinics - along the spectrum of positions on abortion, one can be "pro-choice" to the point of "let's murder any baby any time it's a slight inconvenience," or pro-life to the point of "let's bomb and kill anyone remotely connected to abortion." The correct position, of course, lies between these two extremes (but more to the bombers side really).

The argument here against libertarianism as a trend is rather like someone condemning the pro-life movement because a couple of crazies bomb abortion clinics. Austro-libertarianism is a hyper-extreme expression of the libertarian spectrum; condemning the movement for less govt intervention and control because a couple of crazies want children to starve to death is rather like the above-mentioned abortion example.

Now, what is the greater danger today: the "pro-choice" movement or the people who bomb abortion clinics? Obviously the pro-choice movement is. Similarly, between austro-libertarianism (which on a practical level is hardly a blip on the radar) and socialism (which has been gradually taking over the US for decades now), socialism is the greater threat.

I agree with much of what is being said above. Completely free markets are totally immoral (or rather amoral, which is immoral). Anyone who rejects Pope Leo XIII's social teachings (or anything taught authoritatively by the Papacy) is a heretic. The unchecked growth in power of the multi-national corporation is alarming. And I absolutely agree that one must reject Austro-libertarianism as a heresy, just as they must reject socialism.

My point is merely that we're focusing here on an evil that is of far less pressing concern than socialism. It is an evil, sure, but it's hardly influential, and condemning all forms of libertarianism because this one extremist form is heretical isn't sound logic. Government control, centralization, and interventionism is a large factor in the ongoing decline of this country; counteracting it is both a moral duty and patriotic.

Your review (haven't read the comments) didn't touch on Austrian economic theory. Vox Day has written quite a few posts on Austrian economic theory and how it applies to the current crisis. Seems like the only real school of economic theory that "gets" it since it focuses so heavily on the role that debt plays.

Asking whether "government provided health care" is good or bad is, in my view, a needlessly ideological way of framing the question.

That is only true if you assume that there are no inherent problems with government health care.

The most obvious inherent problem, which we observe in all actual systems, is that government health care subsidies sin by divorcing the services rendered from any spiritual standards or ministry.

Since we do not live in a Christian society, it is the height of foolishness for your church to advocate social policies which arm the government in this respect. In 19th century America, it would have been unpopular, but culturally understandable. Today, no Christian of any reasonable level of intelligence and exposure to the rest of America has any excuse to be ignorant of how our culture has made this dangerous to the church.

I fear that observing things in all actual systems is not usually a strong suit of those advocating government provision of goods and services.

Of course not. Like most intellectuals, they never bother to concern themselves with actual details of implementation.

If you want to see something that so thoroughly sums up what is wrong with intellectuals to a degree it is almost sublime, buy the season of Big Bang Theory where Sheldon has to modify Howard's robot for the robot fighting tournament. It scales from something that small all the way up to what is wrong with the Obama Administration.

Since we do not live in a Christian society it is the height of foolishness for your party to advocate financial policies which arm giant corporations run mostly by avaricious amoralists.

"Mr. Berry is no cheerleader for the free market, and his concern for agricultural communities leads him to be suspicious even of technological advances. But Mr. Berry's concern is about the human ecology of the economy: What effect does our economic life have on the life of the community and the cultural norms that encourage the discipline of virtue? Those who promote the efficiency and prosperity of economic liberty cannot neglect such questions, even if they come to different conclusions than Mr. Berry. An economic system is not an end in itself--the good of the human person remains always the end of all systems."
(Religion and Liberty, vol. 16, no. 1, pp. 2)

The question in the middle of that quote is one that I wish more free-marketeers would ask, and I give Fr. de Souza credit for bringing it up.

That said, based on what you quote above, I would be hesitant to take Ferrara seriously if this summary is accurate:

"Ferrara begins by explaining that the historic phenomenon of capitalism, which Austrian theorists laud for its material benefits, is not a creature of laissez faire economic conditions, but is in large measure the result of government confiscations, interventions, and the bestowal of economic advantages upon the wealthy."

Capitalism, or the industrial revolution in Holland, Great Britain and then America is just not a result of "government confiscations, interventions, and the bestowal of economic advantages upon the wealthy" in large measure or small measure. If he gets the basics about capitalism wrong, I'm not sure I can trust the rest of his analysis.

You've never heard of the state's seizure of church lands, enclosure laws, and the creation of a landless proletariat? Poor laws? Slavery? Convict labor? Corporations? Eminent domain? Land grants? Fractional reserve banking? The repeal of laws against usury and Sunday labor? The Federal Reserve? Patents? Licensing? Subsidies? Public education (i.e., government-subsidized education of an industrial workforce)? Etc. etc. That capitalism and the industrial revolution depend and have depended, from their origins to the present day, upon the favors of the state is really beyond dispute. But if you missed History of Econ. 101 in college, don't despair, Ferrara devotes an entire chapter to the subject.

But Jeff, the very Austro-libertarians you are deploring loathe the Federal Reserve and, I'd be willing to bet plenty of money, are very much anti Public education. (I thought public education was supposed to be one of those things people are in favor of if they are against the pure free market?? This is getting really confusing.) And last I looked, they weren't too happy about licensing laws either.

That's true, Lydia. Once again, Ferrara's point is that the Austrians can't have it both ways - praising capitalism for prosperity and material abundance without acknowledging the critical role of the state in fostering capitalism's "success". Laissez faire markets do not exist anywhere for long.

In other words, actual capitalists in real life, and their genuine interests and influence, are not to be confused with Austrian economic theorists who deal exclusively in abstractions. Austrians like to think of themselves as capitalism's intellectual shock troops, but that is far from the reality.

I think it's pretty debatable to say that government schools, the Federal reserve, and licensing laws, not to mention government subsidies, are a necessary part of "fostering capitalism's success."

It seems to me that it's an odd critique of "capitalism" that somehow blames free market advocates for or tries to implicate them in the very things they famously and vocally oppose! I mean, that's just very strange. If Hillary Clinton & co. had gotten their way and if America now had fully funded socialized daycare would we also be told that _that_ is somehow part of "fostering the success of capitalism"? If we manage somehow to keep the economy from collapsing after the institution of Obamacare, will _that_ be said to be one of the government interventions capitalists are depending on (without admitting it) to "foster their success"? Why should we believe these types of claims?

It seems to me that it's an odd critique of "capitalism" that somehow blames free market advocates for or tries to implicate them in the very things they famously and vocally oppose!

Even more odd when you consider the fact that most free market advocates are not the raving anarchists that Jeff makes them out to be, and actually go to great lengths to show that they do believe government is a legitimate (even necessary) institution.

Several of the things that Jeff listed as supports for Capitalism are actually anathema to free market theory:

I don't think Jeff takes us seriously when we say that we fully recognize the necessity for government in a number of basic areas to lay a framework for the economy.

It's absurd to imply that our fortunes rely on the government except in a symbiotic sense. The government needs us as much as we need it. Without productive private citizens to fund it and who will obey its just laws, government cannot exist in the first place.

"Several of the things that Jeff listed as supports for Capitalism are actually anathema to free market theory"

Except that they were all there at the beginning serving as props to industrial capitalism in one way or another.

In the corporate managerial state we now have the symbiosis between business and government is more codependent than ever. And anyone who thinks that this symbiosis moves only in one direction needs to clean his glasses.

Capitalism began in England with the looting of the monasteries. It was the systematic rationalization of that looting which came to be known as Whig History, and not the Puritan religion, which gave birth to the creed “that the individual is absolute master of his own, and within the limits set by positive law may exploit it with a single eye to his pecuniary advantage, unrestrained by any obligation to postpone his own profit to the well-being of his neighbors, or to give account of this actions to a higher authority. It was, in short, the theory of property which was later to be accepted by all civilized communities”[57] and came to be known as Capitalism.

"That capitalism and the industrial revolution depend and have depended, from their origins to the present day, upon the favors of the state is really beyond dispute."

Well, it depends on what you mean by "favors of the state". I'm no doctrinaire libertarian, so of course I believe that all of society in some sense depends on the "favors of the state". The more interesting question is what was unique to capitalism and what was simply essential for any flourishing society. In the list you provide above, which you suggest in a snarky style I might not be familiar with, I would argue NONE were the unique factors that led to the rise of capitalism and the industrial revolution (I might concede patents -- but that's only because I would point to the unique role inventors and intellect played in the rise of capitalism). But that is because I have read plenty of economic history and reject the Marxist clap-trap that seems to have inflected otherwise sensible people like Ferrara or our own interesting Maximos (e.g. "church lands, enclosure laws, and the creation of a landless proletariat" is just NOT the story of the industrial revolution and/or capitalism -- a good place to start getting your history straight is here: http://www.econ.ucdavis.edu/faculty/gclark/index.html)

The Marxist claptrap in question is nothing other than the papal view of the history and abuses of capitalism. As for "favors of the state," take just one example explored in my book: the limited liability, publicly held corporation without which modern capitalism would not exist. This legal fiction is entirely a creation of the State, enjoys special privileges granted solely by State intervention, is the very matrix of capitalist activity, and its privileged status as a shield against personal liability for wrongdoing has been the cause of a thousand abuses as Pius XI rightly noted in his Marxist claptrap encyclical Quadragesimo anno.

We Catholics must always be on guard against the Zeitgeist that has seduced the whole Western world, persuading nearly everybody that bourgeois liberalism is reactionary conservatism, while socialism is the liberal bugaboo and the only threat to liberty. The formerly Christian West has been traduced into this false alternative ever since the Party of Order emerged in France. Catholic social teaching rejects it. So must we. And I say this as someone who once thought that the likes of Frederic Bastiat and Henry Hazlitt were profoundly conservative thinkers.

In addition to your Marxist training I now read you have access to a time machine: "the limited liability, publicly held corporation without which modern capitalism would not exist." How can you be so sure of your conclusion? Does such a corporation exist in Japan? In all of Western Europe? And do you really think capitalist ingenuity wouldn't have figured out a way to protect risk-takers from failure without the LLC? I'd also like the source for the "thousand abuses" that you (and Pope Pius XI) cite -- that sounds like hyberbole to me.

We Catholics who defend human flourishing and common-sense improvements in the lives of our fellow human beings must be on guard against those who claim to know something about economic history and capitalism but use hyperbole and bad analysis to attack the great engines of human prosperity: the industrial revolution and capitalism. God bless Wal-Mart:

And God bless its unbeatable prices, made possible by its outsourced Chinese wage slaves, forbidden by their government to reproduce.

I will stick with the Marxist Popes, thank you, who have a rather higher conception of "human flourishing" than the ability of Wal-Mart to undersell all its competitors by 15% with the help of communist oligarchs and government-subisidized health care, zoning variances, tax breaks, and a host of other government privileges.

Concerning the modern corporation, I will quote that notorious Marxist, Pius XI: "The laws passed to promote corporate business, while dividing and limiting the risk of business, have given occasion to the most sordid license. For We observe that consciences are little affected by this reduced obligation of accountability; that furthermore, by hiding under the shelter of a joint name, the worst of injustices and frauds are penetrated; and that, too, directors of business companies, forgetful of their trust, betray the rights of those whose savings they have undertaken to administer."

Sound familiar?

Enough from me. A conversation that begins with the accusation that I am a Marxist and have undergone Marxist training is not a conversation in which I want to invest any time.

I have no idea if you are a Marxist or not and assume from your recent comment that you are not. But your understanding of economic history is unfortunately infected with bad Marxist reasoning.

As for Pius XI's quote, it doesn't sound familiar and quite frankly, he seems to be painting with a broad brush ("the worst of injustices and frauds" -- examples please), which is not conducive to insightful analysis of how an economy works or how corporations work (or even how they might be abused).

"Even if this is true (which I question), the real issue is whether Wal-Mart could have become a profitable business if it had provided free health insurance. The most Ferrara is entitled to say is that the Walton family isn't sufficiently charitable. What does Ferrara know about their charitable contributions?

-Neil Parille"

Absolutely correct.

Ferrara does no small disservice to the employees of Wal-Mart trying to make a better living, and totally disregards the obvious point of sad situations those who shop at Wal-Mart are in. Who normally shops at Wal-Mart? Whom does Wal-Mart benefit? Those with less. Wal-Mart is a Godsend to the poor, and it disgusts me when those without any basic economic reasoning and unintended consequences criticize it.

The sweatshops are better than working on the family farms, chopping the bark of rubber trees at 3-4 am in pitch black, and certainly much safer. He does a disservice to those trying to make a better living by choosing the better of two options. Interviews with these workers praise the factories as a way out of the farms, and the freedom to be happier than there previous dire situation.

If Ferrara is correct about Wal-Mart, reaping excessive if not immorally high profits, why does Ferrara himself not have the same business model, cut out the huge incomes for executives, and instead give his workers $40/hour? If there is something wrong with their supposedly "greedy" business plan, why has no one else picked this up and combatted it?

Get it, Mr. Ferrara? If you're not a market-worshipper you've been infected by Marxism. It's either Mises or Marx (both anti-Christian atheists, by the way) with no possible way out of that radical dichotomy. The Popes weren't economists, after all!

Oh, and if I may quote Paul Cella from his thread of the other day: "the one proposition I am fairly confident about is that it is high time we acknowledged (and this goes especially for people on the Right) that business enterprise and finance capitalism are not the same thing."

WalMart isn't just your neighborhood five-and-dime writ large, but a different creature entirely. For "conservatives" to praise them to the skies as the primo example of good ol' American business is remarkably wrongheaded.

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